buybackking's picture
How to invest abroad.

If you read or watch Peter Schiff on youtube, he recommends investing abroad.  It seems many large safe ADRs have moved from the NYSE to the Pink Sheets.  The reason is to avoid as they say paying the costs of Sarbanes-Oxley.  There are literally 100s of ADRs there. Many pay over 5% dividend.  

 http://www.pinksheets.com/pink/companysearch/index.jsp search ADRs and pink sheets.

One thing that bothers me about Schiff is that he claims home prices will drop.  To build a house requires commodities thus, evenutally home prices should be rising to.  I heard many home builders already claim home prices are below replacement costs.  The population is growing 3 million a year in the USA, and some of those people are going to want to live in a new home.

Furthermore, presently the dollar might be overvalued.  I heard comedy by Chris Rock that if you go overseas the dollar won't buy anything.  To me that means  the dollar is presently undervalued to other currencies.  The reason why investors sold off dollars correctly in the early part of the decade.  However, they went a little too far.  The dollar will continue to erode in the U.S. however, the dollars needs to rise to catch up to the foreign currencies.  Thus if you buy a pair of shoes in Great Britain will cost the same as a pair of shoes in the USA after conversion.


Pinksheets

Regarding pink sheets: Pink sheets tend to have the most insane bid-ask spreads I have seen in any market (except the present housing market--sorry, I couldn't help but go there :) ). I haven't heard anything about large ADR issues moving from exchanges to OTC trading, so I can't speak to that or the liquidity that they would have as pink sheets. I'm just warning that pink sheets tend to be a nasty way to invest and companies like Europac probably make a killing pushing clients onto them.

The trade weighted dollar and gold are the only things that have shown any positive trends lately. I would strongly suggest that no one try to be a hero in this market (especially with the government changing the rules so often that even Citi and Wells are butting heads). While hedge funds are blowing up/closing shop left and right, there are still plenty of these morons with momentum and feedback trading strategies (sometimes computer automated) that can pressure trends until they break, causing a sudden reverse (see US dollar).

Giants are at pink

I think Bayer and BASF two german giants are on the pink sheets.  Many foriegn giants are on the pink sheets and many are still on the NYSE and NASDAQ.